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Sunday, July 31, 2011

What can be said about the debt ceiling debate that hasn't already been said? Even if a deal is struck to raise the debt ceiling for the promise of offsetting "cuts", the debt march will continue full force to the brink of fiscal calamity. We are drinking ourselves to death and we badly need an intervention.

The nation is nearly $15 trillion in debt. That number isn't going down. Last year's federal budget was, wait, that's right, the Democrats didn't pass a budget last year. Needless to say, government spending last year without a proper budget was a whopping $3.8 trillion. That's 35% more than the last budget passed by Republicans in 2006 before Democrats took control of Congress. So exactly who inherited a crisis from whom?

The minute Nancy Pelosi says she can't support the cuts proposed by House Republicans, remind her that she put us in this position in the first place. The Tea Party didn't create this debt. They were elected for the exact purpose of dealing with it. That's what last year's tidal wave election was about. The debt ceiling gave them the opportunity to take a stand.

For calling attention to the perils of debt at this moment in history and taking steps to deal with runaway government spending, Tea Party members have been called extremists, terrorists, suicide bombers, and all sorts of new tone rhetoric that progressives supposedly wanted to ban after the Gabrielle Giffords shooting. For promising spending we can't afford and creating this government mess, Nancy Pelosi, Barack Obama, and his ilk have been referred to as "reasonable" and "pragmatic." Since when was proposing a budget that doubled the national debt in ten years reasonable?

Yet still, conservatives have somehow won the messaging battle. You can't find an independent or moderate Democrat voter who doesn't think government cuts should be a large part of the budget solution. This is conservative turf and hopefully it will translate to Republican votes next November.

Does the supposed debt deal go far enough to limit government spending? Did George Lucas ever justify those final three Star Wars movies? Reports suggest that the compromised bill will cut $900 billion over 10 years, but depending on the baseline used by the CBO that could mean less than $150 billion of actual spending reductions. That's a mere $15 billion in cuts a year to budgets in the $4 trillion range.More concerning, $350 billion of the proposed spending reductions, or nearly 40%, will be cuts to defense. That's a heavy price to pay in a dangerous world where Iran is developing nuclear weapons and Communist China is increasingly flexing their military muscle. Liberals like to laud military cuts they made in the 90s under Clinton, but it was those same cuts that forced the U.S. to send men into Iraq and Afghanistan a decade later without safe Humvees or proper body armor.

Perhaps the president sensed John Boehner and Republicans were bluffing all along and wouldn't allow the default date to pass. True, the Tea Party has stood firm, wanting to use the debt ceiling as a firewall to force an immediate reduction in government expenditures, but political reality has interfered. They don't have the numbers in Washington and the press has been especially hostile to their aggressive tactics of reform. Ultimately, it was a gambit other Republicans weren't willing to take.

In chess terms, what the Tea Party proposed was bringing the queen out early and attacking. The strategy is bold and shortens the battle, but can be risky. Republican leadership preferred to take a long-term approach, castle and move some pawns to control the center of the board and hope voters will hold Barack Obama responsible for the mess he's left behind. There's no need for sudden moves in a bad economy when the public is increasingly holding the president responsible, especially given the weak economic data and a potential double dip recession on the horizon (first quarter GDP has already been downgraded to an anemic 0.9%).

Unfortunately with spending still unchecked and a phony solution in the works, we may be running out of time for anything close to a soft landing.

Wednesday, July 20, 2011

They're back! And this time they're going for broke. Call them the Dirty Half Dozen.

The Gang of Six rides again in the U.S. Senate. This is the summer sequel none of us were looking forward to, well except for maybe the damsel in distress in the Oval Office. Like any summer sequel, the script is a lightweight seven pages with huge plot holes, tired characters, and no substance. It's so full of the usual "bipartisan" schlock it's like waking up and seeing Arlen Specter back in the Senate... as a Republican. What is it about real spending cuts and no tax increases that these so-called conservatives don't get?

The Gang of Six circulated a plan that has Congress enact a law now whose principal elements (1) make unspecified spending cuts and unspecified tax increases to yield a $500 billion reduction in the federal deficit, and (2) impose spending caps on discretionary spending, but not on Social Security, Medicare, Medicaid and welfare programs that are the main cause of out-of-control spending. Then the Gang of Six promises — an unenforceable promise — that some time in the next six months Congress will enact a second law with all kinds of Christmas presents for everybody.

All the hard negotiation of spending is being undercut by the usual "kick-the-can-down-the-road" clan in Washington. This is winning only as Charlie Sheen defines it. I suppose when you only run for re-election every six years as senators do, you may not fully comprehend the mood of the electorate. America's hardest-working citizens have drawn a line in the sand. They have said no more empty promises, no more trillion dollar deficits, no more shady backroom deals, and no more business as usual. So typically, the Gang of Six gave us a shady backroom deal of phantom cuts they can't deliver to cover for business as usual.

Oddly enough, this budget battle hasn't even moved from the baby pool into the shallow end of what most of us would consider meaningful cuts, yet Republicans are already coming up for air. Few in Washington have suggested anything as extreme as living within the parameters of the fiscal budget of oh, say, five years ago. That budget, nearly one third smaller than this year's current projections, was considered egregious enough at the time to fire a third of Republicans in Washington. Now Democrats completely refuse to propose a budget for fear of giving drunk sailors a good name. Wow, how times have changed.

As the debt ceiling looms and credit agencies warn our government to cut back, the Democrats are unwilling to put even boondoggles like the president's proposed high speed rail on the chopping block. That's $55 billion of unnecessary spending that hasn't taken place yet, doesn't push seniors over a cliff, and can be eliminated immediately. Speaking of, what's faster than a speeding train proposed by the federal government? A bus ride that gets you from Iowa City to Chicago faster at a fraction of the price.

George W. Bush was supposed to be the big spender who drove our economy into the ground, but his average budget deficits are low enough as to be unreachable by the current administration. We have a president making more detailed plans for his 50th birthday party than producing any specifics whatsoever for halting the debt crisis as the deadline looms on August 2. Where's the beef, as they used to say, Mr. President? Probably being smoked and marinated for that August 3 blowout bash, which you too can take part in from your own home.

President Obama seems annoyed that he is being asked to clean up a crisis he shares a large responsibility in creating. As he used to say on the campaign trail, we can't afford four more years of the last eight years. Instead he has given us eight years of unaffordable spending in a mere four. Now when looked upon for a solution, he wants us to just let him eat his waffle. Even though he is asking us eat our peas.

Lefty: No, you don't get it. This is domestic terrorism. The markets will crash. Investors will lose confidence. The rest of the world will see America as a banana republic.

Fact Robot: You are saying America has to go further in debt in order to show that they are fiscally responsible?

Lefty: Exactly.

Fact Robot: Let me ask the question differently. You are saying America has to approve borrowing trillions of dollars more that the government can't afford to pay back to prove that the nation is serious about getting out of debt?

Lefty: Yes.

Fact Robot: That is illogical. Didn't you also say America had to pass the stimulus to keep unemployment below eight percent?

Lefty: The stimulus was a huge success.

Fact Robot: Current unemployment is 9.2% and has reached as high as 10%. That does not meet your own criteria for success. Do you think it would be fiscally responsible for America to pass a budget?

Lefty: Of course.

Fact Robot: But America has not passed a budget in two years and the president's budget was rejected by the Senate 97-0.

Fact Robot: I don't see what tea bags have to do with it. Last year, Democrats refused to vote for these same tax increases, which would have kicked in automatically if they had not extended the Bush tax rates.

Lefty: The Bush tax cuts only favored the rich. Republicans are the party of millionaires.

Fact Robot: Then why did Democrats and the president pass legislation to keep them from expiring?

Lefty: To help the poor.

Fact Robot: Have you ever listened to your own arguments?

Lefty: The debt wasn't as large then. Now we have to raise taxes to shore up America's finances.

Fact Robot: If the president didn't pass the stimulus, the national debt would be reduced by one trillion dollars. This is the same amount of revenue Democrats are trying to raise with proposed tax increases on millionaires who make $250,000. One might conclude from this data that the president doesn't understand basic math and the stimulus hurt the American economy.

Lefty: No. The stimulus wasn't big enough. The poor are suffering while the rich get richer and all Republicans care about is fat-cat corporations. Now if you'll excuse me, I have to attend a $35,000 a plate fundraising dinner for President Obama, paid for using stimulus dollars he kindly granted my company.

Friday, July 1, 2011

Tom Petty, perhaps the greatest three-chord songwriter ever, has sent a cease-and-desist letter to Michele Bachmann for her use of "American Girl" on the campaign trail. I suppose it's weird for a presidential candidate to refer to themselves as a girl in the first place. "American Woman" by the Guess Who would seem to be the more sophisticated choice, if the band wasn't Canadian and it wasn't actually an anti-American diatribe. But if Ronald Reagan could make Born in the U.S.A. work, why not?

Anyway, in honor of the songwriter's whining, I present 10 Tom Petty songs to describe life under the Obama administration.

10. You Don't Know How it Feels (to be paying $4 for gas)9. Time to Move On (One term only)8. Free Fallin' (as in the dollar, the economy, the president's approval ratings)7. Breakdown (of the American Dream)6. Even the Losers (get recess appointed sometimes)5. You Got Lucky (on capturing Osama)4. Don't Do Me Like That (as ObamaCare will)3. Refugee (cuz your policies have us living like one)2. It's Good to be King (not so good to be your subject)1. Let Me Up (I've Had Enough)